Following the death of his brother Oswald, defeated by Penda at the Battle of Maserfield on 5 August 642, Oswiu became King of the Bernicians. He passed the next decade in obscurity as one of many kings subject to Penda. In 655 Penda invaded Bernicia, driving Oswiu before him. The details of the campaign are unclear, but at the Battle of the Winwæd Oswiu unexpectedly defeated and killed Penda. This victory was followed by Oswiu's short-lived imperium—he is traditionally counted as a Bretwalda—over much of Great Britain. He established himself as King of Mercia, setting up his son-in-law, Penda's son Peada as a subject king.

Oswiu's unchallenged domination of Britain lasted only a short time, ending when a revolt among the Mercians established Penda's son Wulfhere as their king. A negotiated settlement appears to have been preferred on both sides to prevent war. Divisions within the Northumbrian church led to the Synod of Whitby in 664, where Oswiu agreed to settle the Easter controversy by adopting the Roman dating. His later years were marred by conflict with his son Ealhfrith. Oswiu died in 670 and was succeeded by his son Ecgfrith.